611.2331/51

The Ambassador in Peru (Dearing) to the Secretary of State

No. 4326

Sir: I have the honor to acknowledge the Department’s instruction No. 838 of November 21, 1935, (File TA 611.2331/49) concerning the possibility of the inauguration of negotiations for a trade agreement between Peru and the United States, and to thank the Department for its complimentary reference to the manner in which instruction No. 800 of August 9, 1935, was carried out.

On December 17th I again took up this question with the Foreign Minister, explaining to him that the Department is not free to meet Peru’s wishes with regard to sugar and that the situation is due to the Jones-Costigan legislation and the necessity for carrying out the mandates of the agricultural adjustment act by the Secretary of Agriculture. I expressed the personal opinion that were it not for these restrictions, no doubt something could be done to meet the Peruvian wishes, but that since the restrictions existed, it was hoped that the inability to give assurances with regard to the entrance of Peruvian sugar into American markets would not stand in the way of further exploratory conversations for the purpose of ascertaining whether, within the range of the possibilities open to the two governments, a basis exists for entering into trade agreement negotiations.

I took advantage of this opportunity to explain to Dr. Concha the great advantages of the trade treaties now being negotiated by the United States on the broad principle adopted by Secretary Hull: namely, the removing—as far as possible—of all artificial and arbitrary restrictions upon international trade, pointing out how vital it was for the well-being of the world to restore this trade to its normal volume and establish conditions which would enable it to flow freely back and forth.

I said that although the sugar situation might have to be excluded, there was a great deal of other business going on between Peru and the United States which might be most advantageously affected by a well thought out trade agreement, and that at any rate it was extremely important to establish the general principle upon which the present agreements were being negotiated as the one which should prevail between Peru and the United States, so that if the time ever did come when it could be more broadly applied to Peruvian products, it would be easier, and, indeed, almost a matter of course, to do so.

I pointed out that whether Peru realized it or not, it would be benefitted by the most favored nation provision in treaties with third nations and I told of indirect advantages that would come about for [Page 945]Peru in other ways, saying that for this reason also it seemed to me that although the scope of a trade treaty between Peru and the United States could not be as wide as we could wish, such a treaty—as far as it went—would certainly be advantageous, first for the articles directly concerned and the relationships between the two countries, and, as I had stated above, as a strengthening of the general principle supported by Secretary Hull and our Government of breaking down the barriers and freeing international commerce from all artificialities and obstacles.

The Minister expressed his regret that nothing could be done about sugar, was somewhat inclined to shake his head over any other possibilities, but said that he would give the matter some thought and would later speak to me on the advisability of a trade treaty and exploratory conversations for the purpose of determining whether, within the scope of the authority of the two governments, there exists a basis for entering into trade agreement negotiations. Dr. Concha is tired out from a recent attack of illness and it may be a week or two before further conversations can be taken up advantageously. The matter will not, however, be lost sight of but will be followed up when the prospects appear propitious.

Respectfully yours,

Fred Morris Dearing